Disputes Insights #5: The New TEF Arbitration Rules: A Game Changer for Trust, Estate, and Foundation Disputes?

Switzerland is a leading centre for private wealth structures and fiduciary services. Disputes involving trusts, estates, and foundations ("TEF Disputes") are growing in number and complexity. TEF Disputes often cross borders, involve multiple jurisdictions, and are shaped by sensitive family and fiduciary dynamics.

Recognising these challenges, the Swiss Arbitration Centre launched the Supplemental Rules for Trusts, Estates, and Foundations ("TEF Rules"), which entered into force on 1 July 2025.

Private clients, family officers, and legal advisers drafting unilateral instruments – such as wills, trust deeds, or foundation statutes – should consider incorporating TEF arbitration clauses. The TEF Rules offer clarity, predictability, and neutrality.

What Are the TEF Rules?

TEF Disputes have long lacked institutional arbitration frameworks. Ad hoc clauses were sometimes included in governing instruments, but these rarely provided comprehensive procedures. The resulting uncertainty discouraged arbitration.

The TEF Rules fill this gap. They provide a timely and much-needed framework for resolving TEF Disputes through arbitration. They provide a clear, reliable structure aligned with international best practices. They are flexible: parties can incorporate the TEF Rules into their legal instruments or agree to them after a dispute arises. The TEF Rules are especially valuable in multi-jurisdictional disputes where no single court has exclusive authority.

The TEF Rules supplement the Swiss Arbitration Centre's Swiss Rules of International Arbitration ("Swiss Rules"). Where the TEF Rules are silent, the Swiss Rules apply.

The TEF Rules thus provide a neutral and confidential framework, supported by the Swiss Arbitration Centre’s established infrastructure and tradition.

When Do the TEF Rules Apply?

The TEF Rules apply to any arbitration arising from a unilateral legal instrument – such as a will, foundation statute, or trust deed – that contains an arbitration clause referring to the Swiss Rules. They also apply where the parties specifically agree to their use.

By contrast, the TEF Rules do not apply automatically where the arbitration clause is bilateral or multilateral, even if the dispute concerns a trust, estate, or foundation.

Key Features of the TEF Rules

The TEF Rules address the complexities of TEF Disputes, in particular the involvement of multiple parties:

• Notification and Representation: The rules ensure that all persons affected by the dispute – including unborn beneficiaries ("Entitled Persons") – are notified and represented. Standard joinder and intervention provisions under the Swiss Rules apply to those wishing to participate as parties.

• Confidentiality: Confidentiality obligations extend to Entitled Persons, even if they do not join as parties.

• Appointment of the Tribunal: Entitled Persons may comment on the appointment of arbitrators and related disclosures. Their views must be considered, even if they do not become parties.

• Applicable Law: The rules exclude the provision of the Swiss Rules regarding the applicable substantive law in estate disputes. This respects mandatory choice-of-law provisions in many jurisdictions, which may limit a testator's ability to select foreign law.

Model Clauses

The TEF Rules include model arbitration clauses for wills, inheritance contracts, trust deeds, and foundation statutes. These model clauses are a good starting point. However, they do not replace the need for careful legal analysis. Mandatory norms and multiple jurisdictions require early and multi-jurisdictional advice.

Conclusion and Takeaways

The TEF Rules are a welcome development for practitioners handling cross-border private client disputes. They combine Swiss institutional arbitration with features tailored to TEF Disputes. The TEF Rules fill a long-standing procedural gap. They may assist in resolving disputes where family or fiduciary dynamics risk undermining legal clarity.

The following practical takeaways should be considered:

• Review existing unilateral instruments: Private clients, family officers and legal advisers should assess whether to update current instruments – such as wills, trust deeds, or foundation statutes – to include TEF arbitration clauses.

• Consider alternatives in active disputes: Where disputes are already emerging, the TEF Rules offer a private, efficient, and neutral forum. They provide an alternative to costly and fragmented multi-jurisdictional litigation.

• Leverage flexibility: The TEF Rules allow parties to define the procedural law and seat of arbitration. The involvement of arbitrators with common law experience may be crucial in trust-related disputes.

Our team is ready to assist with incorporating TEF arbitration clauses or resolving disputes under the TEF Rules.